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Notice to Class Members

TO: ALL PERSONS WHO PURCHASED LOAN NOTES (“NOTES”) THROUGH PROSPER’S LOAN UNDERWRITING AND SALES MARKETPLACE AT WWW.PROSPER.COM DURING THE PERIOD FROM JANUARY 1, 2006 THROUGH OCTOBER 14, 2008 (“CLASS PERIOD”), EXCLUDING DEFENDANTS, THEIR EMPLOYEES, AND MEMBERS OF DEFENDANTS’ FAMILIES.

PLEASE READ THE NOTICE CAREFULLY AND IN ITS ENTIRETY. YOUR RIGHTS MAY BE AFFECTED BY PROCEEDINGS IN THIS LITIGATION.

If you purchased a Note sold by Prosper during the Class Period, you could get a payment from a class action settlement (the "Settlement”).

If approved by the Court, the Settlement will provide $10,000,000 in installment payments over the course of three years, plus interest earned thereon (the “Settlement Amount”), to pay claims of purchasers of Notes sold by Prosper during the Class Period, costs of litigation and settlement, attorneys’ fees, awards to Named Plaintiffs, and any taxes. Payments will be made in proportion to the aggregate amount of losses resulting from defaulted promissory notes purchased by Class Members from Prosper during the Class Period. The formula for allocating payments is described in the Notice.

Attorneys for the Class Representatives (“Class Counsel”) intend to ask the Court to award them fees of up to one-third of the Settlement Amount, and reimbursement of litigation expenses not to exceed $315,000. Class Counsel also intends to ask the Court to grant Named Plaintiffs monetary awards, the sum of which will not exceed $30,000. If approved by the Court, these amounts will be paid from the Settlement Fund as defined in the Notice.

The Settlement resolves the lawsuit as to whether Defendants Prosper, Christian Larsen, Ed Giedgowd, Kirk T. Inglis, Doug Fuller, James W. Breyer, Larry W. Cheng, and Robert C. Kagle (collectively, the “Defendants”) allegedly violated securities laws due to Prosper’s selling securities without qualifying or registering them and acting as an unlicensed broker-dealer. The Defendants deny the allegations in the lawsuit and deny any wrongdoing.

Get no payment. This is the only option that allows you to be part of any other lawsuit against Defendants about the legal claims in this case.

Object No Later Than March 18, 2014

Write to the Court about why you do not like the Settlement.

Go To A Hearing on April 8, 2014

Speak in Court about the fairness of the Settlement.

Do Nothing

A payment will be mailed if you are an Eligible Recipient, as defined in the Notice. Give up right to object to or exclude yourself from the Settlement. Please fill out the address update form on this website if you need to update your address.